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Basic Question 13 of 20
Which one of the following is a financing activity?
B. Selling debt investments
C. Repaying a bank loan
D. Selling equipment at a loss
A. Writing off an account receivable as uncollectible
B. Selling debt investments
C. Repaying a bank loan
D. Selling equipment at a loss
User Contributed Comments 9
| User | Comment |
|---|---|
| Shelton | A-CFO B-CFI D-CFI ? |
| Khadria | Making and collecting loans = CFI Borrowing and Repaying = CFF |
| maria15 | Thanks Khadria |
| moneyguy | But not the interest paid on that loan. That's operating activity. |
| johntan1979 | Yes, Shelton. CFO CFI CFF CFI |
| Shaan23 | It's soo odd. Comparing to other questions Selling bonds at excess to Par --- CFF Selling Equity ----- CFI Selling Debt investments ---- CFI I thought debt investments would be considered the same as bonds at excess to par but nope. |
| syazwan21 | Shaan23: Well I guess that Selling bonds at excess to par implies raising money for your own company for operations while selling debt investments could mean selling bonds of other companies for profit. Thats why the difference. |
| CJHughes | CFF - selling (issuing) bonds at par and then redeeming later at par. Can't say i've ever seen a bond issued above par. Who would buy it? You would only get par at redemption. (This does not take into consideration bonds with inbuilt call options, which may be called (redeemed) at a premium. They are another matter). CFO - buying/selling bonds above, below, at par (whatever market value at time) and realising gains/losses on their purchases later when they need to generate cash for operations. |
| CJHughes | That comment is incorrect. Bonds can be issued above or below par. My mistake. Rarely would they be issued with a Premium. However, a discount is common when the issuer needs to attract demand. |
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Edward Liu
Learning Outcome Statements
describe the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data
CFA® 2025 Level I Curriculum, Volume 2, Module 4.